Northumbrian Water weathers the storm

Northumbrian Water has delivered a robust annual report showing a £27.8m rise in revenues in a challenging year of weather extremes

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Northumbrian Water

Northumbrian Water has delivered a robust annual report showing a £27.8m rise in revenues in a challenging year of weather extremes.

The company, which serves two million properties in the North East and Essex & Suffolk, saw turnover rise to £756.9m from £729.1m a year earlier, a figure which reflected Ofwat’s 2009 price review of 0.9%.

However, the amount of measured supplies to homes and non-household customers went down over the firm’s financial year, which ended March 31, mainly as a result of continuing economic difficulties across the UK.

Despite the drop in measured supplies volumes, the firm recorded profits for the financial year of £150m – up 5.2% on the year from £142.5m.

The annual performance review for the year, made public on the firm’s websites, said the year had been a challenging one with dramatic weather extremes, starting with drought conditions in early 2012. Water resources were, however, resilient, both in the dry Essex and Suffolk region and the wetter North East, and restrictions weren’t necessary on the use of water.

The drought was followed by a number of severe summer storms and exceptional rainfall levels, which had an impact on sewer flooding, drinking water quality and pollution incident performance.

Meanwhile, operating costs increased to £427.6m, up from £410.2m, reflecting increases in business rates, depreciation, infrastructure renewals and general inflationary pressures.

The report also showed capital investment in the business for the year to March 31 was £232.9m.

In November 2012, the company drew the second £50m tranche of a £150m facility from the European Investment Bank at a fixed rate of 3.23%.

The remaining £50m was drawn after the balance sheet date, in April, at a fixed rate of 2.896%.

The company, which had a head count of 2,981, said it was publishing its business plan in December as part of Ofwat’s price review process, which will describe its strategy for 2015-20, a step on the way to its 25-year aspirations.

The company has conducted comprehensive customer research, formed stakeholder engagement groups, known as Water Forums, in its operating areas which has strengthened the firm’s plans.

Chief executive officer Heidi Mottram said: “Overall, our performance has been very pleasing, although we continuously strive to do better.

“I am delighted that we have further improved the service we provide to our customers in a number of areas.